The AI-Era Layoff Wave: More Than 20 Major Tech Companies

When AI Becomes the Justification for Layoffs

In a scene that has become increasingly familiar, Tel Aviv-based software company Monday.com announced the layoff of more than 600 employees — roughly 20% of its total workforce. The decision came as part of a comprehensive restructuring plan aimed at building a leaner, more focused operating model under a growth strategy that places artificial intelligence at its core. Co-founder Eran Zinman was careful to deny that cost-cutting or replacing humans with machines was behind the decision, insisting it was an adaptation to the new platform vision the company had unveiled approximately a year earlier. Despite anticipated restructuring costs of between $45 and $55 million, the company projects 20% year-over-year revenue growth in 2026.

Troubling Numbers Revealed by Financial Analysis

A recent analysis by the Financial Times found that American tech companies have laid off approximately 140,000 workers since the start of this year. Leading the wave are industry giants including Amazon, Oracle, Meta, and Microsoft — which alone accounted for roughly 50,000 job losses — even as these same companies pour hundreds of billions of dollars into AI data center infrastructure.

Notably, the same analysis revealed that shares of companies citing AI as a reason for their layoffs fell by approximately 10% relative to the Nasdaq index in the thirty trading days following each announcement, suggesting that markets are not entirely convinced by the narratives these companies are putting forward.

The Picture Is Not Entirely Bleak

On the other hand, there is light at the end of the tunnel. Emerging AI companies such as Anthropic and OpenAI continue to expand their teams at a rapid pace, absorbing some of the talent released by the broader sector. Some of the companies conducting layoffs are not eliminating jobs entirely, but rather redistributing them: Meta transitioned approximately 7,000 employees into new AI-related roles while laying off 8,000 others, while IBM has announced it is doubling its hiring in artificial intelligence and hybrid cloud computing.

Key Companies That Announced AI-Related Layoffs in 2026

• Microsoft (July 2026): Cut approximately 4,800 positions — equivalent to 2.1% of its global workforce — mostly within the Xbox gaming division, while acknowledging that AI is changing the way work gets done.
• Oracle (June 2026): Disclosed in its annual financial filings that it had eliminated 21,000 jobs over twelve months, representing 13% of its workforce, citing the widespread adoption of AI technologies as a primary driver.
• GitLab (June 2026): Laid off approximately 350 employees (14% of staff) to fund AI infrastructure, with projected restructuring costs of between $30 and $35 million.
• Google (ongoing through May 2026): Carried out quiet reductions affecting its Cloud division and cybersecurity teams, with estimates ranging between 1,500 and 3,000 engineers, through rolling performance reviews and voluntary retirement programs.
• Intuit (May 2026): Announced the elimination of approximately 3,000 positions — 17% of its workforce — with the goal of redirecting resources toward AI and streamlining its organizational structure.
• Meta (May 2026): Laid off 8,000 employees (10% of its workforce) while simultaneously reassigning 7,000 others to new AI-focused roles.
• Cisco (May 2026): Reduced its headcount by approximately 4,000 positions (5% of staff) as part of a broader reallocation of resources toward cybersecurity and AI technologies.
• Cloudflare (May 2026): Cut 20% of its workforce — roughly 1,100 employees — amid strong quarterly revenue of $639.8 million, reflecting 34% year-over-year growth.

A Broader Perspective

This wave of layoffs reveals a fundamental shift in the structure of the tech labor market. While companies invoke AI as the rationale for reshaping their teams, a legitimate question remains: is this truly a strategic realignment, or cost-cutting disguised as digital transformation? The numbers alone do not provide a definitive answer, but they place both investors and employees in front of a landscape that demands careful and measured attention in the months ahead.

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